DOCTRINE: Applicable laws form part of, and are read into, contracts without need for any

express reference thereto; more so, when it pertains to a labor contract which is imbued with
public interest. Each contract thus contains not only what was explicitly stipulated therein,
but also the statutory provisions that have any bearing on the matter.

LORALEI P. HALILI, PETITIONER, VS. JUSTICE FOR CHILDREN INTERNATIONAL,

ROB MORRIS, AND GUNDELINA A. VELAZCO, RESPONDENTS.

G.R. No. 194906, September 09, 2015

PERLAS-BERNABE, J.

FACTS:

Respondents Gundelina A. Velazco (Velazco) and Rob Morris (Morris), in their respective
capacities as Director and President, executed an employment contract with Halili for a term
of one (1) year, with the condition that either party may terminate the same "at any time by
giving four [(4)] weeks written notice" (termination clause).

On July 13, 2006, JFCI enforced the termination clause by informing Halili that they are
terminating her services as Consultant Program Coordinator, effective August 16,
2006. Claiming that she was illegally dismissed, Halili filed a complaint against JFCI, Velazco
and Morris (respondents) before the NLRC.

ISSUE: WHETHER OR NOT PETITIONER WAS ILLEGALLY DISMISSED DESPITE THE

TERMINATION CLAUSE EXPRESSLY STIPULATED IN THE CONTRACT

HELD:

YES. In this case, it is undisputed that the contract entered into by JFCI and Halili is a fixed-
term employment contract, covering a period of one (1) year. The peculiar feature,
however, of this contract lies in its termination clause which reads that either party may
terminate the same "at any time by giving four (4) weeks written notice"

While said clause is silent on the requirement of a legal cause for the same to be operative,
the fundamental principle — as above-stated — is that the law is read into every contract.
Hence, the contract's termination clause should not be interpreted as a form of blanket-
license by which each of the parties may just abdicate the contract at will. Rather, it is a
clause which allows any of the parties to pre-terminate the employment contract within the
stipulated fixed-term period of one year, provided that the party invoking the same has: (a)
a legal cause for terminating it; and (b) notifies the other party in writing four (4) weeks prior
to the intended date of termination.

That the parties had intended to dispense with the need for a legal cause for the termination
clause to be operative does not sufficiently appear in this case. Had they so intended, then
the contract should have so indicated, as in Price v. Innodata Phils., Inc., which contractual
provision explicitly allowing the employer to pre-terminate the same "with or without cause"
was, however, struck down as invalid.
It is clear that the first requisite of legal cause was not complied with by JFCI. No just or
authorized cause was proven by substantial evidence in support of its invocation of the
termination clause stated in its contract with Halili. As such, the pre-termination of the
contract was infirm. Thus, considering further that respondents' argument on its purported
loss of trust and confidence in Halili cannot be taken into account at this stage since it was
belatedly raised for the first time on appeal, the NLRC did not gravely abuse its discretion in
ruling that Halili's dismissal was illegal. The CA's issuance of a writ of certiorari was perforce
improper.